Exhibit 4.1
CONVERTIBLE NOTE PURCHASE AGREEMENT
Among
STOCKGROUP INFORMATION SYSTEMS INC.
and
THE INVESTORS SIGNATORY HERETO
Dated as of December 31, 2001
SECURITIES EXCHANGE AGREEMENT
This Securities Exchange Agreement (this "Agreement"), dated as of December 31,
2001, among Stockgroup Information Systems, Inc. (formerly known as
▇▇▇▇▇▇▇▇▇▇.▇▇▇ Holdings Inc.), a Colorado corporation (the "Company"), Deephaven
Private Placement Trading Ltd. ("Deephaven") and Amro International, S.A.
("Amro"). Each of Deephaven and Amro is a "Holder" and collectively, the
"Holders."
RECITALS
1. Pursuant to a Convertible Debenture Purchase Agreement dated as of April 3,
2000, the Company issued and sold to the Holders, and the Holders purchased from
the Company: (i) an aggregate principal amount of $3,000,000 of the Company's 8%
Convertible Notes due March 31, 2002 (collectively, the "Original Notes"), which
are convertible into shares of the Company's common stock, no par value (the
"Common Stock"), and (ii) certain Common Stock purchase warrants (collectively,
the "Original Warrants" and together with the Original Notes, the "Original
Securities") which are exercisable for an aggregate of 181,818 shares of Common
Stock.
2. The Company and the Holders have agreed, subject to the terms and conditions
of this Agreement, to convert, on the date hereof, a portion of the Original
Notes into shares of Common Stock and to exchange (the "Exchange"): (i) the
balance of each Holder's Original Notes for the Company's newly created
convertible notes, in the form attached hereto as Exhibit A, in the aggregate
principal amount indicated beside such Holder's name on its signature page
hereto (as its respective terms and conditions may be changed pursuant to the
terms thereof, collectively, the "Exchange Notes") and (ii) each Holder's
Original Warrant for a Common Stock purchase warrant in the form of Exhibit B,
entitling the Holder to acquire the number of shares of Common Stock indicated
beside such Holder's name on its signature page hereto, upon the terms and
conditions set forth therein (collectively, the "Exchange Warrants" and,
together with the Exchange Notes, the "Exchange Securities").
3. The Exchange is intended to qualify as an exempted transaction under Section
3(a)(9) of the Securities Act of 1933, as amended (the "Securities Act").
4. Terms used and not defined in this Agreement that are defined in the Exchange
Notes shall have the respective meanings set forth in the Exchange Notes.
NOW, THEREFORE, in consideration of the above recitals, the covenants contained
in this Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and the Holders
agree as follows:
1. Conversion and Exchange of Securities.
(a) Immediately prior to the consummation of the Exchange, each Holder will
convert a principal amount of its Original Notes equal to the product of the
investor ratio set forth below its name on its signature page hereto (as
applicable to each Holder, the "Holdings Ratio") and $100,000 into shares of
Common Stock at a conversion price of $0.15. No later than one Trading Day
immediately preceding the Exchange Date (as defined herein), the Company will
deliver to each Holder a stock certificate free of any legends, evidencing such
shares of common stock.
(b) Subject to the terms and conditions of this Agreement, the Company will
issue and deliver the Exchange Securities to the Holders and the Holders will
accept the Exchange Securities from the Company in exchange for the Original
Securities. The Exchange shall occur at the offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the execution date of this Agreement or such other date
or location as the parties shall agree. The date of the Exchange is hereinafter
referred to as the "Exchange Date."
(c) On the Exchange Date, the parties will deliver the following: (A) the
Company will deliver to each Holder: (1) this Agreement, executed by Company,
(2) the legal opinion of the Faegre & ▇▇▇▇▇▇ LLP, 2500 Republic Plaza, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, outside counsel to the Company,
in agreed form, (3) its Exchange Notes, registered in the name of such Holder,
(4) its Exchange Warrant, registered in the name of such Holder, and (5) the
Company's transfer agent instructions (the "Transfer Agent Instructions"), in
the form
acceptable to the Holders, executed by the Company and delivered to and
acknowledged in writing by the Company's transfer agent; and (B) each Holder
shall deliver: (1) this Agreement, executed by such Holder, (2) its Original
Notes and (3) its Original Warrant.
(d) Following the Exchange, the Original Securities shall be canceled and of no
further effect.
2. Representations and Warranties of the Company. The Company hereby represents
and warrants to the Holders as follows:
(a) Organization and Qualification. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of Colorado, with the requisite corporate power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The
Company has no subsidiaries other than as set forth in Schedule 2(a)
(collectively the "Subsidiaries"). Each of the Subsidiaries is an entity, duly
incorporated or otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. Each
of the Company and the Subsidiaries is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which the nature
of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, (x) adversely
affect the legality, validity or enforceability of (1) the Exchange Securities,
(2) this Agreement, or (3) the Transfer Agent Instructions (collectively, the
"Transaction Documents"), (y) have or result in a material adverse effect on the
results of operations, assets, prospects, or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, or (z) adversely impair
the Company's ability to perform fully on a timely basis its obligations under
any of the Transaction Documents (any of (x), (y) or (z), a "Material Adverse
Effect").
(b) Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
this Agreement and otherwise to carry out its obligations hereunder and under
the Exchange Securities. The execution and delivery of the Transaction Documents
by the Company and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary action on the part
of the Company and no further action is required by the Company. The Transaction
Documents and all other instruments and documents executed by the Company in
connection therewith have been duly executed by the Company and, when delivered
in accordance with the terms thereof, will constitute the valid and binding
obligations of the Company enforceable against the Company in accordance with
its terms.
(c) Issuance of the Exchange Securities. The Exchange Securities have been duly
authorized and, when issued in accordance with the terms hereof, will be duly
and validly issued, fully paid and nonassessable, free and clear of any lien,
charge, security interest, encumbrance, right of first refusal or other
restriction (collectively, "Liens"). The Company has on the date hereof and
will, at all times while the Exchange Securities are outstanding, maintain an
adequate reserve of duly authorized shares of Common Stock, reserved for
issuance to the holders of such Exchange Securities, to enable it to perform its
conversion, exercise and other obligations thereunder. Such number of reserved
and available shares of Common Stock shall not be less than the total number of
shares of Common Stock issuable upon: (i) conversion in full of the Exchange
Notes multiplied by 200% and (ii) exercise in full of the Exchange Warrants
(collectively, the "Initial Minimum"). The shares of Common Stock issuable upon
conversion of the Exchange Notes and exercise of the Exchange Warrants are
referred to herein as the "Underlying Shares." Upon issuance pursuant to the
terms of the Exchange Securities, the Underlying Shares shall be duly authorized
and, when issued and paid for in accordance with the terms hereof and thereof,
will be duly and validly issued, fully paid and nonassessable, free and clear of
any Liens.
(d) No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not (i) conflict with or violate any
provision of the Company's or any Subsidiary's certificate of incorporation,
bylaws or other charter documents (each as amended through the date hereof), or
(ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court, regulatory body or
governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected.
(e) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents. A "Person"
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.
(f) SEC Reports; Financial Statements. The Company has filed all reports
required to be filed by it under the Securities Act and the Exchange Act of 1934
(the "Exchange Act"), including pursuant to Section 13(a) or 15(d) thereof, for
the two years preceding the date hereof (or such shorter period as the Company
was required by law to file such material) (the foregoing materials being
collectively referred to herein as the "SEC Reports") on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Securities and Exchange Commission (the "Commission") promulgated thereunder,
and none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in
accordance with U.S. generally accepted accounting principles applied on a
consistent basis during the periods involved ("GAAP"), except as may be
otherwise specified in such financial statements or the notes thereto, and
fairly present in all material respects the financial position of the Company
and its consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit adjustments.
(g) No Default or Violation. The Company is not: (i) in default under or in
violation of (and no event has occurred which has not been waived which, with
notice or lapse of time or both, would result in a default by the Company
under), nor has the Company received notice of a claim that it is in default
under or that it is in violation of, any indenture, loan or credit agreement or
any other agreement or instrument to which it is a party or by which it or any
of its properties is bound, (ii) in violation of any order of any court,
arbitrator or governmental body, or (iii) in violation of any statute, rule or
regulation of any governmental authority, in each case of clause (i), (ii) or
(iii) above, except as could not individually or in the aggregate, be reasonably
expected to have or result in a Material Adverse Effect.
(h) Valid Exchange Offer; Rule 144. The Company has not paid, nor has it
accepted payment, directly or indirectly, any commission or other remuneration
for the solicitation of the Exchange and, to the best knowledge of the Company,
no commission or other remuneration has been paid or committed by any Person,
directly or indirectly, for the solicitation of the Exchange by any other
Person. The issuance of the Exchange Securities qualifies as an exempt
transaction under Section 3(a)(9) of the Securities Act and is therefore exempt
from the registration requirements of the Securities Act. The commencement of
the holding period applicable to the Exchange Securities and the Underlying
Shares issuable upon conversion of the Exchange Notes and exercise of the
Exchange Warrants under Rule 144 occurred on April 3, 2000, the date of the
original issuance of the Original Notes and the Original Warrants.
(i) Disclosure. The Company confirms that neither it nor any other Person acting
on its behalf has provided the Holders or their agents or counsel with any
information that constitutes or might constitute material, nonpublic
information. The Company understands and confirms that the Holders will rely on
the foregoing representations in effecting transactions in securities of the
Company. All disclosure provided to the Holders regarding the Company, its
business and the transactions contemplated hereby are true and correct and do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading. The Company
acknowledges and agrees that the Holders do not make nor have made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3.
3. Representations and Warranties of the Holders. Each Holder hereby for itself
and for no other Holder, represents and warrants to the Company as follows:
(a) Authorization; Enforcement. Such Holder has the requisite power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder. The execution
and delivery of this Agreement by such Holder and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of such Holder and no further action is required by such
Holder. This Agreement and all other instruments and documents executed by such
Holder in connection with this Agreement have been duly executed by such Holder
and, when delivered in accordance with the terms hereof, will constitute the
valid and binding obligations of such Holder enforceable against such Holder in
accordance with its terms.
(b) Ownership of Original Securities. Such Holder is the sole legal and
beneficial owner of the Original Securities that it is exchanging hereunder and
is conveying such Original Securities to the Company free and clear of any Liens
that it may have created or suffered to exist. Such Holder has neither
previously sold, assigned, conveyed, transferred or otherwise disposed of, in
whole or in part, the Original Securities, nor is such Holder party to any
agreement other than this Agreement to sell, assign, convey, transfer or
otherwise dispose of, in whole or in part, the Original Securities.
(c) Sophisticated Person. Such Holder is a sophisticated entity and has adequate
information concerning the business and financial condition of the Company to
make an informed decision regarding the Exchange. Such Holder has independently
made its own analysis and decision to enter into this Agreement based on such
information as it has deemed appropriate.
(d) No Commission. To the best knowledge of such Holder, no commission or other
remuneration has been paid by such Holder or any Person, directly or indirectly,
to solicit its consummation of the Exchange.
4. Other Agreements of the Parties.
(a) Registration Issues. If for any reason a Holder notifies the Company in good
faith that Underlying Shares may not be sold without volume limitations under
Rule 144(k) promulgated under the Securities Act, then the Company shall, as
promptly as possible after the receipt of such notification but in any event
prior to the 30 th day following the receipt of such notice (such date, the
"Filing Date"), prepare and file with the Commission a "Shelf" registration
statement covering the resale of the Underlying Shares (the "New Registration
Statement") for an offering to be made on a continuous basis pursuant to Rule
415. The New Registration Statement shall be on Form S-3 or Form SB-2 and the
Company shall use its best efforts to cause the New Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event prior to the 90 th day following the Filing
Date (such date, the "Effective Date"), and shall use its best efforts to keep
the New Registration Statement continuously effective under the Securities Act
until all the securities registered thereunder are sold. The Company shall
provide the Holders with a copy of the New Registration Statement prior to its
filing for their review. In the event that the New Registration Statement is not
filed with the Commission by the Filing Date or declared effective by the
Effective Date (each of such events, an "Event"), then (i) the Company shall pay
to each Holder an amount in cash, as liquidated damages and not as a
penalty, equal to 2% of the aggregate outstanding principal amount of its
Exchange Notes and (ii) on each monthly anniversary of each such Event (if such
Event has not been cured prior to such monthly anniversary date) until the Event
is cured, the Company shall pay to such Holder an amount in cash, as liquidated
damages and not as a penalty, equal to 2% of the aggregate outstanding principal
amount of its Exchange Notes. If the Company fails to pay any liquidated damages
pursuant to this Section in full with ten calendar days after the date that such
payment becomes due and payable, the Company will pay interest at a rate of 18%
per annum (or such lesser amount that is permitted to be paid by applicable law)
to the Holders, accruing daily from the date such liquidated damages are due
until such amounts, plus all such interest thereon, are paid in full.
(b) No legend. Subsequent to April 3, 2002, neither the Exchange Securities nor
certificates evidencing the Underlying Shares shall contain any restrictive
legend.
(c) Acknowledgment of Dilution. The Company acknowledges that the issuance of
the Underlying Shares upon conversion of the Exchange Notes and exercise of the
Exchange Warrants will result in dilution of the outstanding shares of Common
Stock, which dilution may be substantial under certain market conditions. The
Company further acknowledges that its obligation to issue Underlying Shares upon
such conversions and exercises in accordance with the terms of the Exchange
Notes and the Exchange Warrants is unconditional and absolute, regardless of the
effect of any such dilution.
(d) Reservation and Listing of Underlying Shares.
(i) The Company shall: (1) in the time and manner required by any exchange,
market or quotation system on which the Common Stock is traded, prepare and file
with such securities exchange or market or trading or quotation facility on
which the Common Stock is then listed an additional shares listing application
covering a number of shares of Common Stock which is not less than the Initial
Minimum, (2) take all steps necessary to cause such shares of Common Stock to be
approved for listing on any such other national securities exchange or market or
trading or quotation facility on which the Common Stock is then listed, as soon
as possible thereafter, and (3) provide to the Holders evidence of such listing,
and the Company shall use its best efforts to maintain the listing of its Common
Stock thereon. If the number of Underlying Shares issuable upon conversion in
full of the then outstanding principal amount of Exchange Notes and exercise in
full of the Exchange Warrants exceeds 85% of the number of Underlying Shares
previously listed on account thereof with any such required exchange, then the
Company shall promptly (and in any case within 10 Business Days from the
Company's discovery of such events) take the necessary actions to list a number
of Underlying Shares sufficient to cover all such Underlying Shares which may so
be issued.
(ii) If on any date the Company would be, if a notice of conversion or exercise
(as the case may be) were to be delivered on such date, precluded from issuing
(a) 200% of the number of Underlying Shares as would then be issuable upon a
conversion or exercise in full of the Exchange Securities (the "Current Required
Minimum") due to the unavailability of a sufficient number of authorized but
unissued or reserved shares of Common Stock, then the Board of Directors of the
Company shall promptly (and in any case, within 30 Business Days from such date)
prepare and mail to the stockholders of the Company proxy materials requesting
authorization to amend the Company's certificate of incorporation to increase
the number of shares of Common Stock which the Company is authorized to issue to
at least such number of shares as reasonably requested by the applicable Holder
in order to provide for such number of authorized and unissued shares of Common
Stock to enable the Company to comply with its issuance, conversion exercise and
reservation of shares obligations as set forth in this Agreement, the Exchange
Notes and the Exchange Warrants (the parties hereto agree that the sum of (x)
the number of shares of Common Stock then outstanding plus all shares of Common
Stock issuable upon exercise of all outstanding options, warrants and
convertible instruments, and (y) the Current Required Minimum, shall be a
reasonable number). In connection therewith, the Board of Directors shall (a)
adopt proper resolutions authorizing such increase, (b) recommend to and
otherwise use its best efforts to promptly and duly obtain stockholder approval
to carry out such resolutions (and hold a special meeting of the stockholders no
later than the earlier to occur of the 60 th day after delivery of the proxy
materials relating to such meeting and the 90 th day after request by a holder
of Exchange Securities to issue the number of Underlying Shares in accordance
with the terms hereof) and (c) within 7 Business Days of obtaining such
stockholder authorization, file an appropriate amendment to the Company's
certificate of incorporation to evidence such increase.
(e) Release. Effective as of and from the Exchange Date and based on the good
and valuable consideration exchanged between the Company and each Holder, each
Holder and the Company (each, a "Releasor") hereby releases and discharges the
other and its predecessors, successors, and affiliates, employees, officers,
directors, agents, representatives, and assigns (collectively, "Releasees"),
from all actions, causes of action, suits, debts, dues, assessments, late fees,
sums of money, expenses, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises, variances,
trespasses, damages, judgments, executions, obligations, duties, claims,
matters, liabilities, violations of law, fines, penalties, responsibilities,
attorneys' fees, maintenance charges, and demands whatsoever, in law, admiralty
or equity, which against the Releasees (or any of them) the Releasors,
Releasor's successors or assigns ever had, now have or hereafter can shall or
may have, for, upon or by reason of any matter, cause or thing whatsoever from
the beginning of the world to the date of this Agreement.
(f) Mandatory Prepayments under the Exchange Notes. Notwithstanding anything to
the contrary set forth in the Exchange Notes and in addition to any rights
available to the Holders under the Exchange Notes: (i) on June 30, 2002, the
Company will prepay to each Holder a principal amount of its Exchange Notes
equal to the product of such Investor's Holdings Ratio and $100,000, (ii) on
each of: September 30, 2002, December 31, 2002, March 31, 2003, June 30, 2003
and September 30, 2003, the Company will prepay to each Holder a principal
amount of its Exchange Notes equal to the product of such Investor's Holdings
Ratio and $20,000, (iii) on each of: December 31, 2003, March 31, 2004, June 30,
2004, September 30, 2004and December 31, 2004, the Company will prepay to each
Investor which shall have delivered to the Company the notice contemplated by
Section 6 of the Exchange Note, a principal amount of its Exchange Notes equal
to the product of such Investor's Holdings Ratio and $20,000, (iv) if prior to
the first year anniversary of the Exchange Date, the Company shall have, on one
or more occasions, sold shares of Common Stock or Common Stock Equivalents for
aggregate gross proceeds of no less than $2,000,000, the Company will prepay to
each Holder a principal amount of its Exchange Notes equal to the lesser of (x)
the aggregate principal amount outstanding under such Holder's Exchange Notes
(and all other amounts, costs, expenses and liquidated damages, if any, due in
respect of such Exchange Notes) and (y) the product of such Investor's Holdings
Ratio and 20% of the aggregate gross proceeds received by the Company from the
sale of such Common Stock or Common Stock Equivalents during such period in
excess of $2,000,000 and (v) if during the period between the first year
anniversary of the Exchange Date
and the second year anniversary of the Exchange Date, the Company shall have, on
one or more occasions, sold shares of Common Stock or Common Stock Equivalents
for aggregate gross proceeds of no less than $500,000, the Company will prepay
to each Holder a principal amount of its Exchange Notes equal to the lesser of
(x) the aggregate principal amount outstanding under such Holder's Exchange
Notes (and all other amounts, costs, expenses and liquidated damages, if any,
due in respect of such Exchange Notes) and (y) the product of such Investor's
Holdings Ratio and 20% of the aggregate gross proceeds received by the Company
from the sale of such Common Stock or Common Stock Equivalents during such
period in excess of $500,000. Notwithstanding anything herein to the contrary,
upon delivery to the Company by a Holder of the notice contemplated by Section 6
of the Exchange Note, the Company's obligation to prepay a principal amount
outstanding under such Holder's Exchange Note pursuant to the terms hereof shall
extend to such Exchange Note as its terms and conditions have been changed
pursuant to the delivery of such notice.
(g) Non-Disclosure of Non-Public Information. The Company shall not disclose
non-public information to any Holder or its agents unless prior to disclosure of
such information the Company identifies such information as being non-public
information and such Holder enter into a non-disclosure agreement in form
mutually acceptable to the Company and such Holder.
5. Miscellaneous.
(a) Fees and Expenses. No later than the 20 th calendar day immediately
following the Exchange Date, the Company shall reimburse the Holders for up to
$20,000 of their legal fees and expenses incurred in connection with the
preparation and negotiation of the Transaction Documents. Other than such
reimbursement, each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred
by such party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all stamp and other taxes
and duties levied in connection with the issuance of the Exchange Securities.
(b) Entire Agreement. This Agreement and the Exchange Securities contain the
entire understanding of the parties with respect to the transactions
contemplated hereby and supersede all prior agreements and understandings, oral
or written, with respect thereto. This Agreement does not have the effect of
nullifying any prior written agreements between the parties that do not
specifically address the Exchange, except that to the extent the terms of any
such agreement conflict with the terms of this Agreement, the terms of this
Agreement shall control.
(c) Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of: (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified in this Section prior to 6:30 p.m. (New York City time) on a
business day, (ii) the business day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified in this Agreement later than 6:30 p.m. (New York City time) on
any date, (iii) the business day following the date of mailing, if sent by
nationally recognized overnight courier service and marked for next business day
delivery, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
as follows:
If to the Company: Stockgroup Information Systems, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ Facsimile No.: (604)
331-1194 Attn: Corporate Secretary
With copies to: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Barristers & Solicitors Suite 2550, ▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇ Facsimile No.: (604)
684-0916 Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
If to a Holder: To the address set forth under such Holder's name on the
signature pages hereto.
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
(d) Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by both the
Company and the Holders or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of either party
to exercise any right hereunder in any manner impair the exercise of any such
right accruing to it thereafter.
(e) Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.
(f) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Holders. Each Holder may assign any or
all of its rights under this Agreement or the Exchange Securities to any Person
to whom such Holder assigns or transfers any securities, provided such
transferee agrees in writing to be bound, with respect to the transferred
securities, by any provisions hereof that apply to a "Holder."
(g) No Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.
(h) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretation,
enforcement and defense of the transactions
contemplated by this Agreement (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced in the state and federal courts sitting in the City of New
York, Borough of Manhattan (the "New York Courts"). Each party hereto hereby
irrevocably submits to the jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of this Agreement), and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is improper or that such New York Courts are inconvenient or will
be an improper forum for such proceeding. Each party hereto (including its
affiliates, agents, officers, directors and employees) hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto (including
its affiliates, agents, officers, directors and employees) hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. If any party shall commence
an action or proceeding to enforce any provisions of this Agreement, then the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorneys fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.
(i) Survival. The representations, warranties, agreements and covenants
contained herein shall survive the consummation of the transactions contemplated
herein, including the conversion of the Exchange Notes and exercise of the
Exchange Warrants.
(j) Severability. In case any one or more of the provisions of this Agreement
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affecting or impaired thereby and the parties will attempt, in
good faith, to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Agreement.
(k) Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, the Holders will be
entitled to specific performance of the obligations of the Company under this
Agreement and the Exchange Securities. Each of the Company and the Holders agree
that monetary damages may not be adequate compensation for any loss incurred by
reason of any breach of its obligations described in the foregoing sentence and
hereby agrees to waive in any action for specific performance of any such
obligation the defense that a remedy at law would be adequate.
(l) Further Assurances. The parties hereto agree that each shall execute and
deliver any and all further agreements, instruments, certificates and other
documents, and shall take any and all action, as any of the parties hereto may
reasonably deem necessary or desirable in order to carry out the intent of the
parties to this Agreement.
(m) Independent Nature of Holders' Obligations and Rights. The obligations of
each Holder under any Transaction Document is several and not joint with the
obligations of any other Holder and no Holder shall be responsible in any way
for the performance of the obligations of any other Holder under any Transaction
Document. Nothing contained herein or in any Transaction Document, and no action
taken by any Holder pursuant thereto, shall be deemed to constitute the Holders
as a partnership, an association, a joint venture or any other kind of entity,
or create a presumption that the Holders are in any way acting in concert with
respect to such obligations or the transactions contemplated by the Transaction
Document. Each Holder shall be entitled to independently protect and enforce its
rights, including without limitation the rights arising out of this Agreement or
out of the other Transaction Documents, and it shall not be necessary for any
other Holder to be joined as an additional party in any proceeding for such
purpose.
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IN WITNESS WHEREOF, the Company has executed and delivered this Securities
Exchange Agreement as of the date first above written.
STOCKGROUP INFORMATION SYSTEMS, INC.
By:________________________ Name: Title:
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DEEPHAVEN PRIVATE PLACEMENT TRADING LTD.
By:_____________________________________ Name: Title:
Aggregate Principal Amount of Exchange Notes: $1,475,000
Number of shares underlying Exchange Warrant: 121,212
Holdings Ratio: 76.66%
Address for Notice:
Deephaven Private Placement Ltd. c/o Deephaven Capital Management LLC ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Attn: ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
AMRO INTERNATIONAL, S.A.
By: _______________________ Name: Title:
Aggregate Principal Amount of Exchange Notes:$449,000
Number of shares underlying Exchange Warrant: 60,606
Holdings Ratio: 23.34%
Address for Notice:
c/o Ultra Finanz Grossmuenster ▇▇▇▇▇ ▇ ▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ - ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
With copies to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇ Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇ Attn: ▇▇▇▇ ▇.
▇▇▇▇▇, Esq.